Derek Achong

The Na­tion­al Gas Com­pa­ny (NGC)  has won its law­suit against Su­per In­dus­tri­al Ser­vices (SIS) over an al­leged move to dis­pose of its as­sets pend­ing the res­o­lu­tion of ar­bi­tra­tion pro­ceed­ings over the con­tro­ver­sial Beetham Wa­ter Treat­ment Plant. 

De­liv­er­ing judg­ment at the Hall of Jus­tice in Port-of-Spain yes­ter­day, Jus­tice Joan Charles up­held the State-owned en­er­gy com­pa­ny’s chal­lenge over a se­ries of fi­nan­cial in­stru­ments ex­e­cut­ed by SIS, which it claimed were de­signed to en­sure that it would not be able to re­coup any mon­ey, in the event that it suc­ceeds in the ar­bi­tra­tion pro­ceed­ings. 

Ac­cord­ing to the ev­i­dence pre­sent­ed by NGC’s lawyers in the case, in March 2015, months be­fore NGC even­tu­al­ly ter­mi­nat­ed the con­tract, SIS took five loans from its sub­sidiary Rain For­est Re­sorts Lim­it­ed at a to­tal val­ue of $330 mil­lion. 

Sev­er­al months lat­er, SIS ex­e­cut­ed four mort­gages and a deben­ture, un­der which SIS as­signed all of its as­sets to be used se­cu­ri­ty to cov­er the loans. 

The com­pa­ny al­so claimed that af­ter it filed the claim, both SIS and Rain For­est Re­sorts ad­mit­ted that no mon­ey was trans­ferred be­tween them, de­spite the mort­gages be­ing reg­is­tered. 

While NGC ad­mit­ted that the trans­ac­tions did not ap­pear to be fraud­u­lent on the sur­face, it sug­gest­ed that ev­i­dence gath­ered by it re­vealed that they (the fi­nan­cial in­stru­ments) were in­tend­ed to sul­ly its chances of po­ten­tial­ly re­coup­ing the mon­ey as the al­leged debt to the sub­sidiary would have to be cleared first. 

NGC first sued the com­pa­nies in De­cem­ber 2015 af­ter it be­gan ar­bi­tra­tion pro­ceed­ings against them over the still-in­com­plete wa­ter treat­ment plant.

While the project was es­ti­mat­ed to cost US$162,055,318.77, NGC was seek­ing to re­cov­er $400 mil­lion, which was ad­vanced to SIS be­fore the con­tract was can­celled in 2016. The ar­bi­tra­tion is still pend­ing and will not be af­fect­ed by the case be­fore Charles. 

Through the law­suit, NGC was seek­ing or­ders set­ting aside the four mort­gages and a deben­ture. 

It ini­tial­ly ob­tained an in­junc­tion freez­ing $180 mil­lion of the com­pa­nies as­sets pend­ing the de­ter­mi­na­tion of the law­suit.

While the in­junc­tion ap­pli­ca­tion was be­ing de­cid­ed, SIS and Rain For­est Re­sorts ap­plied to have the claim struck out based on the fact that NGC failed to meet the dead­line for ap­ply­ing for a case man­age­ment con­fer­ence of the sub­stan­tive claim.

The Court of Ap­peal de­liv­ered a ma­jor­i­ty judge­ment in which it over­turned Charles’ de­ci­sion and struck out the claim. 

While the Ap­peal Court’s de­ci­sion was up­held by the Privy Coun­cil, NGC was still al­lowed to pur­sue the claim as it had a pend­ing re­lief from sanc­tions ap­pli­ca­tion, which was put on hold while the is­sue was be­ing ap­pealed. 

NGC was rep­re­sent­ed by Deb­o­rah Peake, SC, Ja­son Mootoo, and Sav­it­ri Sooraj. SIS was rep­re­sent­ed by Neal Bis­nath and Ly­dia Men­don­ca, while Ramesh Lawrence Ma­haraj, SC, and Navin­dra Ram­nanan rep­re­sent­ed Rain For­est Re­sorts.